FATF

The Financial Action Task Force (FATF), an intergovernmental body established in 1989 at the initiative of the G7, is the global standard-setting authority for policies and measures to combat money laundering (ML), terrorist financing (TF), and the financing of proliferation of weapons of mass destruction (PF). Its 40 Recommendations form the basis of the legal and regulatory frameworks that states implement to mitigate these risks.

The FATF holds no coercive or enforcement powers over states, nor does it impose financial penalties. It ensures compliance with its standards through a rigorous peer-review mechanism, known as the Mutual Evaluation Process, which is grounded in a methodology adopted by its member states.

Where a jurisdiction fails to adequately implement FATF standards, the organisation may publicly designate it by including it on one of its two monitoring lists—commonly referred to as the "grey list" and "black list". Such designation results in enhanced international scrutiny and may adversely affect the jurisdiction's reputation, as well as its financial relationships and cross-border operations.